What about dividends? Stocks are usually a buy when yields peak. For one, at bear market bottoms when no one wants to own stocks, companies forced to pay out more in earnings to attract equity buyers. Secondly, economic troughs are accompanied by higher interest rates. The higher interest rates in the real economy are usually matched with higher yields on corporate bonds and larger dividends.
June 3rd, 2010 | Dan Denning | 21 comments | ContinuedAll Posts Tagged With: "interest rates"
Europe, Greece and a French Blonde
We see it coming too. We’ve already seen what happens when a small country runs up too much debt. Investors get worried. Interest rates rise. The country can no longer borrow to cover its deficits…or to pay its past loans. Disaster.
May 14th, 2010 | Bill Bonner | 0 comments | Continued
A Free Market In Chains
US policymakers at the Federal Reserve and the Treasury Department have been trying to re-inflate the credit bubble by pumping trillions of dollars of fresh credit and currency into the financial system. The Fed is still maintaining these Keynesian tactics, despite the increasing possibility that inflation and other adverse outcomes will result.
April 23rd, 2010 | Dan Amoss | 0 comments | Continued
Long-term Unemployment a Structural Shift in Nature of American Economy
…did you notice that nearly 45% of America’s 15 million unemployed have been out of a job for over six months?
April 8th, 2010 | Dan Denning | 0 comments | Continued
Property and the Big Four Australian Banks
There is an increasing amount of focus on the Australian residential property market. Last week, outgoing BHP Chairman Don Argus said: ‘I think the Australian Banking Sector has gone too far. You can look at some of them now as giant building societies.’ He was referring to the large exposure that the big four Australian banks have to residential property.
April 7th, 2010 | Greg Canavan | 42 comments | Continued
Martin Armstrong Suggests the Sovereign Debt Crisis in Europe Will Lead to Rising Interest Rates
But according to America’s self-described “#1 political prisoner” Martin Armstrong, the Western world’s fiscal malfeasance has left it trapped between two equally undesirable but unavoidable outcomes: default of civil unrest. We are at the pointy end of the crisis (Phase two as he describes it). Yet very few people seem to appreciate what’s actually happening.
March 22nd, 2010 | Dan Denning | 9 comments | Continued
How Does an Economy Expand When the Banks are Lending Less Money?
We believe the “expansion” reported in the GDP figures is mostly counterfeit. It’s government spending and hot money filtering into the economy.
March 4th, 2010 | Bill Bonner | 0 comments | Continued
Bernanke Calls U.S. Economic Recovery “Nascent”
But remember, the central bankers telling us that America’s recovery is “nascent” and that Australia will benefit for many years from a “very big” investment boom in the resources industry are the same blokes who did not give you a single warning about what was coming in 2007 and 2008. Why is that?
February 25th, 2010 | Dan Denning | 18 comments | Continued
Banks Could Face Serious Trouble from Losses on Residential and Commercial Real Estate
“For the North Atlantic economies,” Debelle concludes, “this was a big recession which, combined with large falls in both commercial and housing property prices, should result in large losses.” He goes on to point out that the government-guaranteed larger lenders might survive these larger losses. But smaller regional banks might not.
February 18th, 2010 | Dan Denning | 50 comments | Continued
How Mr Market Influences a Stock Price
Investor emotion accounts for these fluctuations. Many years ago, Benjamin Graham characterised this emotion as ‘Mr Market’. Sometimes Mr Market was very happy and positive about the future and was willing to pay handsomely to buy shares. At other times, Mr Market thought the sky was falling in and wanted to give those same shares away at bargain prices.
February 16th, 2010 | Greg Canavan | 3 comments | Continued
Will Bailing Out the Greeks Really Make American Businesses More Profitable?
Bailing out the Greeks is a big mistake. But it’s a mistake everyone seems to want to make. There’s probably a Latin dictum for this sort of thing.
February 15th, 2010 | Bill Bonner | 0 comments | Continued
USA Has Fives Times As Much Sovereign Debt As All the PIIGS Put Together
The PIIGS owe $2 trillion, which might need to be restructured. Yes, dear reader, the sovereign debt problem is a big one – much bigger than Bear Stearns, Lehman Bros. and AIG.
February 10th, 2010 | Bill Bonner | 0 comments | Continued
Majority of Australians Believe House Prices Will Rise in Next Twelve Months
Now you have to assume a lot of income growth from here for affordability to remain the same with house prices at those levels. Or you’d have to assume much lower interest rates. That would be a stupid assumption, though, given that interest rates are headed up at the moment…
January 25th, 2010 | Dan Denning | 293 comments | Continued
The Fight Between Greed and Fear, Boom and Bust, Expansion and Contraction
This is a fight that goes on all the time. But it is usually kind of a ‘cold war.’ Years go by without much activity. Stocks meander. A few companies go bust. A few boom.
January 12th, 2010 | Bill Bonner | 1 comment | Continued
A Sovereign Debt Crisis Bullish for U.S. Dollar and Bearish for Gold
In fact you don’t have to imagine it all. Or be insane. Bloomberg reports that, “Dollar Rises as Stocks, Commodities Fall in Flight From Risk.”
February gold futures fell below $1,100, down 2.5%. The Dow Jones Industrials fell 1.27%. The S&P 500 shed just over 1%. And the U.S. dollar rallied against all 16 currencies in the dollar index. What gives?
December 18th, 2009 | Dan Denning | 0 comments | Continued
